Sunday, October 14, 2012

.@mittromney What lurks in Romney's still-unreleased tax returns? #p2 #tcot

By Douglas Stumph

Vanity Fair

A few weeks ago, Mitt Romney finally released his 2011 tax return, as he promised to do last January, when, under pressure from Newt Gingrich, he reluctantly made public his 2010 return. He adamantly refuses to release any more, the ones from before his current presidential run.

As Senate Majority Leader Harry Reid observed, "Gov. Romney is showing us what he does when the public is looking. The true test of his character would be to show what he did when everyone was not looking at his taxes."

Mitt's father, George Romney, would have agreed with Harry. "One year could be a fluke, perhaps done for show," he observed when he released an unprecedented 12 years' of returns for his 1968 presidential run.

Mitt Romney's critics have focused on his low tax rate of around 14 percent. But Romney, who is generally said to be worth around $250 million (he won't tell us how much -- some on Wall Street think he is worth at least $1 billion), is proud of that.

"I think it's the right way to encourage economic growth -- to get people to invest, to start businesses, to put people to work," he said on "60 Minutes."

This is his core economic philosophy, the main issue he is running on: If you let rich people like him keep their money, they will invest it back in America and create American jobs.

The real reason we need to examine 'Romney's previous tax returns is to see if he puts his money where his mouth is. The two he has released are eye-openers.

The 2011 return has 267 pages devoted to offshore corporations and partnerships. Reuters' Lynnley Browning reported that $4.5 million of the Romneys' long-term capital gains for 2011 came from foreign assets and $3.5 million from foreign income. The New York Times noted that Romney invested $77,262 in CNOOC Limited, the Chinese state-owned oil company, and in the Industrial and Commercial Bank of China. He also had large investments in a Swiss bank, a Luxembourg steel company and machinery companies in Denmark and Japan. (These were all sold on Aug. 10, 2011, the day before Romney debated his Republican rivals in Iowa and before he started blasting President Barack Obama for being soft on Chinese trade policies.)

To explain all this foreign activity, Bradford R. Malt, 'Romney's tax wizard, said, "These are investments in third-party entities. Suppose I buy 100 shares of Toyota stock. I do not have a Japanese account. I have 100 shares of Toyota stock." (This is true of some of 'Romney's foreign activities, but not others, such as Sankaty, the Bermuda shell corporation "wholly owned" by him, and the Swiss bank account that tax expert Lee Sheppard in Forbes called a "bet against America.")

Malt's Toyota analogy makes you wonder: Was Romney investing in Toyota when he wrote that 2008 op-ed recommending that General Motors go bankrupt?

Frankly, there is nothing shocking or wrong about rich people making foreign investments. Their first priority is to make more money, no matter where. But that's why giving them huge tax breaks and gaping loopholes on the theory they will invest all the money saved back in America doesn't make sense. They might invest in America, but just as often they might put their money, as Romney has, in Chinese oil companies.

Ann Romney played the victim card, going on TV to claim the "more we release, the more we get attacked." Let's just point out that Obama released 12 years of his returns. But, as Ann Romney surely knows, hers and 'her husband's are not garden-variety returns. Bermuda shell corporations, Swiss bank accounts, investments in 30 offshore corporations and partnerships in tax havens -- and this in just the two Romney returns prettified for public consumption -- raise important questions about Mitt Romney's commitment to America. They will be answered only if he comes clean with the rest of his returns.

With so many red flags blazing around the Romneys' finances, it's a scandal they have not been forced to disclose more. Equally disturbing is that Mitt Romney, who claims his father as a role model, continues to betray his father's legacy of integrity. 

Man up, Mitt. Stop dishonoring your father. Release the decade's worth of tax returns from before your current campaign for the presidency. 

Stumpf is Vanity Fair's executive editor and the author of a novel, "The Confessions of a Wall Street Shoeshine Boy."

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